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Bali continues to be a top choice for investors who want to start a tourism business. Starting a travel agency in Bali is one way to be a part of this industry.
In this article, we will discuss foreign ownership of travel agencies in Bali. We will also detail the requirements to open a travel agency in Bali. Additionally, we will share some insights about the cost to open this type of business. We will also fill you in on relevant regulations you need to know.
There is an important distinction between a travel agent and a travel agency in terms of what they can do.
A travel agent can sell products and services related to travel. However, travel agents cannot create their own packages and products. As such, a travel agent must have some association with a travel agency.
On the other hand, a travel agency can create its own packages and products. At the same time, the agency can sell these packages. This means that a travel agency can conduct the same transactions as a travel agent. Additionally, a travel agency can operate without a travel agent.
A foreign investor can have partial ownership of a travel agency in Bali. However, foreigners cannot register as travel agents. Fortunately, you don’t need to be a travel agent to operate a travel agency.
Using a Special Purpose Vehicle to Open a Travel Agency in Bali
The maximum allowed foreign ownership for a travel agency is 70% for investors from ASEAN countries or 67% for other foreigners. As such, a foreign investor must find a local partner in Indonesia. One way to get around this is through a special purpose vehicle.
A special purpose vehicle is a company that holds shares on behalf of the real owner. The special purpose vehicle, essentially, is the legal entity to meet the regulatory requirements.
Emerhub can serve as your special purpose vehicle in Bali. We will draft a legal agreement to ensure that you retain control of your company. We will also make sure that the agreement protects your interests.
Open a travel agency in Bali.
Start a travel and tours business with Emerhub as your special purpose vehicle.
What can a foreign-owned travel agency in Bali do?
Foreign-owned travel agencies can engage in the following activities:
- Planning and packaging of tours. This involves creating travel packages that include tourist attractions, particularly within Indonesia.
- Selling tour packages. Foreign-owned travel agencies can sell packaged tours. They can do this through a third party or directly to consumers.
- Conduct tours. Foreign-owned travel agencies can conduct tours. They can also provide tour guide services related to tour packages they have sold.
- Making reservations. They can make reservations on behalf of clients for accommodations, restaurants, and other venues.
- Provide tourist transportation services.
- Selling tickets to cultural events and tourist attractions.
- Assist in matters related to travel documents. Travel agencies can facilitate the processing of travel documents like visas and passports.
You must meet the following requirements when opening a business in Indonesia:
- Minimum paid-up capital. Foreign businesses in Indonesia must have a minimum paid-up capital of IDR 2,500,000,000 (approx. USD 170,000). Note that in Indonesia, if a company has any amount of foreign ownership, it is a foreign company.
- Domicile Letter (Surat Keterangan Tempat Usaha). All businesses in Indonesia must have an appropriate address. This is a certificate stating the location of your business. Note that your agency can operate tours anywhere in Bali regardless of your business address.
- Environmental License (Surat Pernyataan Pengelolaan Lingkungan). Travel agencies and tour operators must get an environmental license. The purpose of the license is to get the consent of the business’ neighbors. Additionally, it ensures that you will not cause damage to the environment.
- Operational Licenses. The required operational licenses vary depending on where you register your travel agency. For example, Badung requires the Tourism Business Registration License. Emerhub’s consultants will assist in obtaining all necessary operational licenses.
- Company Structure. Companies in Indonesia must also have the following people before registration. At least two shareholders, a resident director, and a commissioner.
Emerhub can help you register your company in Bali. We can also assist in obtaining the necessary licenses for your business.
The cost to rent an office in Bali depends on the location and features of the office space. Annual rental fees for offices in Bali can cost as little as IDR 80,000,000 (approx. USD 5,500), or as much as IDR 560,000,000 (approx. USD 38,200). It is common for lease periods in Bali to last as long as 3 years.
A more cost-effective alternative is to use a virtual office with annual fees ranging from USD 1,100 to USD 2,000. Using a virtual office address will significantly lower your overhead costs. Since you can operate tours across Bali regardless of your address, this is a suitable option for travel agencies. This is especially true if your primary method of communicating with clients is online.
USD 5,500 to USD 38,200*
USD 1,100 to USD 2,000
Aside from rental costs, expect to pay around USD 600 to USD 1,500 in out of pocket costs to set up your travel agency in Bali. Such costs include obtaining a domicile letter and necessary licenses.
All travel agencies must register with the Association of the Indonesian Tours and Travel Agencies (ASITA). The requirements for registration include the following:
- Documents related to your business including your business identification number and tax card.
- Recommendation letters from two travel agencies that are ASITA Bali members.
Aside from these documents, you must also pay a membership fee of IDR 5,000,000 (approx. USD 340) before registration which will also be your deposit. This is refundable when you leave ASITA. In addition to that, you must also pay IDR 5,350,000 (approx. USD 365) which will serve as your contribution to ASITA for one year.
Emerhub can also assist in preparing the requirements for your ASITA registration. We can also assist in processing your registration.
Ready to open your travel agency in Bali? Get in touch with Emerhub and our consultants will be glad to assist you. We can help you fulfill all the requirements to set up a travel agency. Fill out the form below or send an email to [email protected].
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